Gambling has given Ho-Chunk new hope

Mar. 3, 2014

The Ho-Chunk tribe's gaming operations generate about $200 million in profit annually. The Ho-Chunk are tied with the Oneida in the number of casinos, and their profits are comparable to those of the Potawatomi. / Kate Golden/Wisconsin Center for Investigative Jou

Written by

Bill Lueders

Wisconsin Center for Investigative Journalism

Ho-Chunk president Jon Greendeer at the tribe's headquarters in Black River Falls. Greendeer says the advent of gaming has helped many tribal members move from dependence to independence. / Kate Golden/Wisconsin Center for Investigative Jou

About ‘DOUBLING DOWN’

Gannett Wisconsin Media is publishing an exclusive seven-part series called “Doubling Down: The Great Divide in Indian Gaming.” The stories will appear in each of our 10 daily Gannett Wisconsin Media newspapers through March 9. Gannett Wisconsin Media I-Team reporter Kathleen Foody spearheaded the project in conjunction with local reporters and photojournalists at Gannett Wisconsin Media news organizations. The Wisconsin Center for Investigative Journalism in Madison also partnered with the newspapers. Print publication:Feb. 23: Casinos pull tribes out of despair, but gaming hasn’t been a cash cow for all Wisconsin tribes. Feb. 24: Voters who created a lottery in a 1987 referendum unwittingly paved the way for Indian casino gaming to become a dominant and powerful force. Feb. 25: Individual payments to tribe members continue to fuel debate within Indian County, especially when a tribe can no longer afford it. March 1: For addicts, the gaming industry’s expansion in Wisconsin brought ruin, not profit. March 2: For scattered Ho-Chunk tribe, gaming has caused conflict, created opportunity. March 3: Improving health care was one of tribe members’ first priorities as gaming began. March 9: Gaming’s most significant changes may be ahead, bringing uncertainty to Wisconsin tribes.

How we did this report

Gannett Wisconsin Media’s Investigative Team began researching the effects of tribal gaming in our state in November. The Wisconsin Center for Investigative Journalism based in Madison partnered on the report. The team traveled hundreds of miles to visit five tribe reservations and six casinos or gaming facilities located across the state, from Forest County to Milwaukee. They spoke with more than 50 people including tribe officials and members, casino employees and gamblers, residents of nearby communities and observers of the gaming industry and tribe culture. This seven-part series also depends on dozens of federal, state and tribal documents detailing the money flowing in and out of casinos in Wisconsin. Gannett Wisconsin Media filed 55 requests with five federal agencies under the Freedom of Information Act to obtain copies of tribal government audits from 2008 to 2012. Any organization receiving more than $300,000 in federal awards must file these documents. All but two of these requests were filled. Much of the information provided about gaming from tribes to the state is confidential. Wisconsin officials agreed in the compacts regulating gaming to keep revenue information for individual casinos and each tribe private. The Wisconsin Center for Investigative Journalism filed requests under the state’s Public Records Law, seeking audits that the Office of Indian Gaming and Regulatory Compliance produced on tribal gaming operations since Jan. 1, 2011. The Department of Administration, which oversees the office, withheld four tribal memos attached to the audits and redacted all substantial information from the audits. Gregory Murray, the department’s chief legal counsel, concluded: Compacts between tribes and the state require that gaming records be confidential. The records contained confidential information about tribes’ internal processes and releasing them could result in a competitive disadvantage or weaken security at gaming facilities.

Brian Decorah, the Ho-Chunk's executive director of business, at the Black River Fall casino. Decorah says gaming has created jobs and opportunities for tribal members: 'We're building careers for people.' / Kate Golden/Wisconsin Center for Investigative Jou

The Ho-Chunk's Dejope casino on the edge of Madison has 1,100 Class II slot machines and eight poker tables. According to a federal audit, the casino made a profit of $45 million in fiscal 2012. / Photo by Linda Falkenstein

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BLACK RIVER FALLS — Chloris Lowe remembers how it used to be. His people, the Ho-Chunk, were impoverished, like most of the nation’s Native American tribes. Unemployment was rampant. There were no tribal businesses, and debt stirred talk of bankruptcy.

“The tribe subsisted wholly on federal and state programs,” said Lowe, who served as the Ho-Chunk’s top political leader in the early 1980s and again in the mid-1990s.

“We were, for all practical purposes, a welfare state.”

All that is different today, due in large part to the tribe’s ability to run gambling operations. The tribe, which prefers the word “gaming,” now operates a network of six casinos, with 175,000 square feet of casino floor space, 5,000 slot machines and about 100 tables, for games including blackjack, poker and roulette.

The Ho-Chunk’s gambling operations generate about $200 million in profit annually, tribal officials confirm. That accounts for more than a third of the annual totals reported for all 11 state tribes in a 2012 state audit. The Ho-Chunk are tied with the Oneida in the number of casinos, and their profits are comparable to those of the Potawatomi.

Gambling has provided tribal members with jobs, opportunity and income. It has allowed the tribe to build infrastructure and create programs for its roughly 7,400 members, and to preserve the Ho-Chunk way of life.

“In the course of less than 35 years, we’ve changed a complete society, and for the better,” says Lowe, now a business consultant to tribal nations. “It’s a monumental change.”

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Indian gambling has allowed the Ho-Chunk to capitalize on what is otherwise the tribe’s greatest drawback. Its land holdings are mostly small, scattered in more than a dozen Wisconsin counties. But they include parcels near larger population and visitor centers, like Madison and the Wisconsin Dells.

Jon Greendeer, the tribe’s elected president, agreed that having scattered lands in key places is an advantage “if your goal is to make money.” But, he added, “if your goal is to preserve your people, your culture, your language, it’s the worst thing on Earth.” He would rather have a tribal homeland with geographic continuity.

“Our families have been ripped apart, our communities have been disenfranchised, our stories have been lost, our villages are no longer,” Greendeer said. “We’ve lost a lot.”

Getting started

On a recent Saturday afternoon, the tribe’s casino on the east edge of Madisonis booming. There are hundreds of cars in the lot and most of the facility’s 1,100 slot machines are in use.

Row after row of players are participating in a grand income redistribution scheme, parting with their money in hopes of making more. It’s a pursuit that has only one sure winner.

The Ho-Chunk’s casino empire grew out of the tribe’s first business, a tobacco store that opened in a used trailer in the Wisconsin Dells in 1982, with the help of a U.S. Small Business Administration loan. Lowe, then tribal chairman, said the store “produced the seed money for everything else that followed.” The next year, on the same site, the tribe opened a bingo hall.

By this time, Lowe has already been ousted as chairman, a not-uncommon fate for Ho-Chunk tribal leaders. But he continued to play a role in the tribe’s evolving gambling business, including its second bingo hall in Black River Falls.

Over time, in a saga that included an FBI probe, a shooting, an arson at the Dells facility, and the conviction of an outside management consultant on bribery charges, the Ho-Chunk assumed the task of managing their own gambling operations.

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“I was always of the opinion that this was something we could handle,” Lowe said.

A series of court decisions and Wisconsin’s creation of a state lottery in 1987 paved the way for full-fledgedcasinos, which the Ho-Chunk now operate in the Dells, Madison, Black River Falls, Nekoosa, Tomah and Wittenberg.

Lowe acknowledges that the Ho-Chunk have endured internal discord related to their gambling operations. “It has caused splits within families, splits within communities,” he said. “Change is disruptive.” But he thinks the gains from gambling have been worth it.

“We’ve gotten through a lot of conflict,” Lowe said. “There will be more of that in the future, but not as intense.”

Where the money goes

The economic impact of the Ho-Chunk’s gambling operations is far-ranging. The tribe is the largest employer in two Wisconsin counties, Sauk and Jackson, where the Dells and Black River Falls casinos are located.

“The tribe is very important to the area,” says Sarah Hudzinski, spokeswoman for the Wisconsin Dells Visitor & Convention Bureau. Its casino and convention space draw in visitors, and the tribe works cooperatively with non-native businesses, like small hotels.

Hudzinski also praises the Ho-Chunk for being good neighbors, with a “philosophy of giving back to the community.” Last August, the tribe donated $25,000 to help build an amphitheater at nearby Mirror Lake State Park. A dedication ceremony is planned on June 12.

While the economic impact of gambling on the scattered Ho-Chunk tribe has not been quantified, tribal leaders attest that unemployment has declined, college enrollment has risen and more members own their own homes.

The tribe’s headquarters in Black River Falls now include a health center and courthouse that will eventually host a tribal police department. Revenues from gambling have also helped the tribe build relationships with other governments: federal, state and local.

Perhaps most importantly, it has created jobs for tribal members. “We’re building careers for people,” said Brian Decorah, the Ho-Chunk’s executive director of business.

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Greendeer agrees, saying gambling has empowered the Ho-Chunk and spurred “not an exodus but definitely a migration of many from dependence to independence.”

The Ho-Chunk employ about 3,500 people, 28 percent of whom are tribal members. Nearly 2,300 of these work in the casinos or affiliated businesses, like hotels.

Each of the tribe’s 7,400 enrolled members receive about $12,000 a year in per capita payments from gambling revenues, in quarterly installments. That comes to nearly $90 million a year.

Payments to young people are held in trust until they turn 18 — or 25, for those who don’t graduate from high school or get a GED diploma.

Besides the per capita payments, the tribe has an annual budget of roughly $50 million. This funds a range of programs, including housing assistance, college scholarships, health and dental coverage, and elder care. There’s even a program that covers gym memberships and pays tribal members, who face a 25 percent rate of diabetes, for the time they spend exercising.

And the Ho-Chunk give about $1 million a year to charity. “I have a couple megabytes on a spreadsheet of all of the charities we’ve given to,” Greendeer said. Among them are programs for compulsive gamblers, whom Greendeer considers “a liability” to the industry’s image.

The tribe’s rising fortunes have helped preserve its cultural heritage. “Our language is the most important thing,” says tribal spokesman Collin Price. A tribally funded program works with public school districts in Tomah, Black River Falls and Wisconsin Dells to teach Ho-Chunk — not just to native students but all who desire.

Gambling is dominant

Greendeer acknowledges that an economy built on gambling may not be sustainable in the long run. He envisions a future where individual members, not tribal government, are driving opportunity.

He framed it as a question: “Do you want our government to build a bowling alley and a grocery store, or do you want to create the environment to support native entrepreneurs?”

But the profit margins of gambling make other ventures less attractive. “I can take one slot machine and I can destroy any business that you try to create,” Greendeer said. “I can make more money off of that.”

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Figures from federal audits of the Ho-Chunk Nation show the tribe made a total of $957 million in “net cash” -- profit -- from its gambling operations in the five fiscal years between 2008 and 2012. This includes $207 million in fiscal 2012, which ended on June 30 of that year.

The five-year gambling total dwarfed the $64 million earned from the tribe’s other economic enterprises, including its five casino-based convenience stores. In fact, the profits from these other sources did not even match the $81 million the tribe received during this period in federal and state aid, which fund a wide range of health and human service programs.

The tribe is seeking new economic activities outside of gambling. But Greendeer said the tribe is “very cautious and almost overprotective” about such opportunities, in part because of past exploitation. Tribal decisions are not made, to borrow a phrase, at the speed of business. And tribal politics are fraught with peril.

For instance, Greendeer has not told tribal members he met with President Barack Obama for about 45 minutes last fall to discuss his opposition to the Menominee tribe’s plan to open an off-reservation casino in Kenosha. He worries that if that plan nonetheless comes to pass, his trip to the White House will be decried as a waste of time and money. “How much did you spend?” he imagines being asked.

Both the Ho-Chunk and Potawatomi have strongly objected to the Kenosha casino, which has received federal approval. Greendeer concedes his tribe is worried about the projected $20 million revenue loss from this competition but also argues that the southern part of the state is the Ho-Chunk’s ancestral homeland.

The Ho-Chunk also plan to expand their casino empire, in Beloit. The tribe in 2012 reached an interagency agreement with the city of Beloit and Rock County and is awaiting federal and state approvals.

Decorah said the Beloit facility is expected to have about 1,800 slot machines, which would make it second to the Dells in terms of size. Greendeer expressed confidence it will be built. “It’s going to be great,” he said.

The nonprofit Wisconsin Center for Investigative Journalism (www.WisconsinWatch.org) collaborates with Wisconsin Public Radio, Wisconsin Public Television, other news media and the UW-Madison School of Journalism and Mass Communication. All works created, published, posted or disseminated by the Center do not necessarily reflect the views or opinions of UW-Madison or any of its affiliates.